If this is your first visit, be sure to
check out the FAQ by clicking the
link above. You may have to register
before you can post: click the register link above to proceed. To start viewing messages,
select the forum that you want to visit from the selection below.

We Made a Profit on the AIG Bailout

US Treasury announces sale of remaining AIG stock held by government
By Associated Press, Updated: Monday, December 10, 2:37 PM
WASHINGTON — The U.S. government said Monday that it is selling its remaining shares of American International Group stock, moving to close the books on the government’s biggest bailout during the 2008 financial crisis.

Treasury said it had begun a sale of 234.2 million shares of common stock in a public offering. The government’s shares represent a 16-percent ownership stake in the insurance company.
US Treasury announces sale of remaining AIG stock held by government
By Associated Press, Updated: Monday, December 10, 2:37 PM
WASHINGTON — The U.S. government said Monday that it is selling its remaining shares of American International Group stock, moving to close the books on the government’s biggest bailout during the 2008 financial crisis.

Treasury said it had begun a sale of 234.2 million shares of common stock in a public offering. The government’s shares represent a 16-percent ownership stake in the insurance company.

Treasury has already recovered more on its AIG investment that the original $182.3 billion bailout. It was the largest government bailout package, including both loans and federal guarantees.

As of September, Treasury and the Federal Reserve had received $197.4 billion.

AIG, which is based in New York City, nearly collapsed at the height of the financial crisis. The company suffered massive losses from exotic financial instruments whose value was based on mortgage securities.

AIG became a symbol for excessive risk on Wall Street and a touchstone of public anger. It was criticized by some members of Congress for spending $440,000 on spa treatments for executives only days after it was bailed out.

AIG stock closed at $33.36 on Monday, down 77 cents from Friday’s close. AIG stock has traded between a low of $22.19 and a high of $37.67 over the past 52 weeks.

Arguments were made about how much the "bail out" of AIG was costing us. Turns out, we made a profit on the deal. I said at the time, I thought this was more like a loan than an expense. In fact, out total profit (not announced on today's sale, but just doing the math) should be about 22 billion dollars.

Nice to get a little good news now and again.

Here is the question of the day, does anyone think that wealthy people should pay a lower percentage of their income to taxes than middle class people? Don't argue tax brackets, just a simple question. Do you think someone earning 46 million dollars should pay a lower percentage of their income than say someone earning sixty thousand?

I read a book that I highly recommend everyone read while on vacation last week (hence why I haven't responded to any threads so if I missed something someone quoted me that is my apologies). It's about freemarket (not pro business) and against crony capitalism. Written by an Italian immigrant. A Capitalism for the People: Recapturing the Lost Genius of American Prosperity
Luigi Zingales

He speaks about this in the book. It's not about that we made a profit (which is a unintended surprise outcome that is def a good thing) it's about the fact we did it. It started back 20 years ago with bailouts. It's that we removed basically the fear of taking horrible aggressive risks. So while we made a return on the investment the investment should have never happen.

To be clear, all I was writing about was the good news. All I was trying to make clear is that some things that people were calling expenses, were in fact not expenses at all.

The reason AIG was bailed out had to do with the housing industry, and then to the larger banking community, and then, to the larger need of unfreezing our economy. To further point out that this was not a partisan statement on my part, because this occurred under President Bush, and, as someone based in finance, I supported it. I did not like it, but I understood why it was necessary.

Now, in the end, this "expense" turns out to be a profit. And to also be clear, it is a profit to all of us who pay taxes. To me that is good news.

BTW, I am still on the bus for people who say that a financial institution that is to big to fail is to big, and to that end, would love to see the largest institutions broken up into smaller pieces.

I am still on the but of re-instituting Glass/Stegal.

The things that were done, were necessary, but I would prefer to have a system that the necessity did not exist.

Here is the question of the day, does anyone think that wealthy people should pay a lower percentage of their income to taxes than middle class people? Don't argue tax brackets, just a simple question. Do you think someone earning 46 million dollars should pay a lower percentage of their income than say someone earning sixty thousand?